SPRINGFIELD -- Gov. Pat Quinn wants to end the state’s contribution to the Teachers’ Retirement Insurance Program in the budget year that will start July 1.

DOUG FINKE

SPRINGFIELD -- Gov. Pat Quinn wants to end the state’s contribution to the Teachers’ Retirement Insurance Program in the budget year that will start July 1.

The state was expected to contribute nearly $87 million to TRIP next year. It is unclear how that money will be made up – or whether retirees will have to pay more – if lawmakers go along with the idea.

That means Catherine Hammersley will be watching the state’s budget machinations closely this spring.

Hammersley, 60, a retired administrator with the Harrisburg School District, relies on the retired teachers program for her health-care coverage in retirement. It costs her about $184 a month.

“Our budget’s already being pinched with the cost of fuel going up and groceries and commodities,” Hammersley said.

Tucked away in the budget plan Quinn submitted to lawmakers last week is the administration’s proposal to end the state subsidy to both TRIP and to a similar, but much smaller program, covering retired community college employees. The state’s TRIP contribution in next year’s budget is supposed to be $86.6 million, while the contribution to the College Insurance Program was to be $4.1 million.

“Due to the state’s fiscal challenges created over decades of mismanagement, the state will no longer be using general revenue funds to fund CIP and TRIP,” said Kelly Kraft, spokeswoman for Quinn’s budget office. “Downstate teachers and community colleges will still be able to buy into the state system to receive health insurance by making up the contributions.”

More than 70,000 covered

Just how those contributions will be made up is the question, since TRIP is funded through a variety of sources. In addition to the state contribution, schools contribute a percentage of their payroll to the program. Active teachers also contribute based on their salaries, and the state contribution is supposed to match the amount paid by active teachers.

Retirees who are members of TRIP also pay premiums for the insurance. This year, a retired teacher pays a total of $170 to $650 a month for health insurance, depending on the type of coverage the retiree selects and whether he or she qualifies for Medicare, said Jim Bachman, executive director of the Illinois Retired Teachers Association.

Retirees’ dependents pay more for their TRIP coverage.

There are a total of 71,538 members of TRIP, including 61,188 retirees and 10,350 dependents. There are about 90,000 retired educators in Illinois.

Bachman said about 5,000 TRIP members age 65 and over don’t qualify for Medicare, leaving them with only TRIP for their health coverage.

“You (also) have a lot of people between the ages of 55 and 65 who wouldn’t qualify for Medicare yet,” he said.

No warning

Bachman said his organization had no advance warning that the administration wanted to end the state contribution to TRIP. He said he hopes to meet with administration officials in the next few days to learn more about the rationale for the decision.

“We want to find out if it is to be part of the pension negotiations or a separate discussion,” Bachman said.

The governor and some legislative leaders have called for changes to state-funded pensions to reduce their squeeze on state finances. Quinn has convened a working group of state lawmakers to make recommendations for change by April 17.

In his budget speech, Quinn said about 90 percent of retired state employees – those who had 20 or more years on the job -- pay no premiums for their health insurance.

Bachman said that benefit does not apply to retired educators.

“Obviously, when you are speaking about retired educators, they are paying a portion of their insurance,” he said.

Bachman, like others, couldn’t say what a loss of state funding would mean to TRIP participants.

“You’re going to have to look at some other type of funding mechanism to be brought into that,” he said. “Whether that is the educator having to pay more or whether the school districts would have to pay more…”

Changes could also be made to benefits to make up the money, such as charging more for co-payments or medications.

“Ultimately, the person is paying more,” Bachman said.

Ending the program would be catastrophic, he added.

“You would have a lot of retired educators who have very small pensions who don’t have Medicare out there on their own,” Bachman said. “They would have tremendous difficulty finding health insurance because of their age. If they did, it would be very expensive. You would destitute a lot of people.”

IEA will fight

Trying to shift costs of the program to school districts also has opposition.

“As these things get passed on to districts, it ultimately means cuts to the quality of education,” said Mike Chamness, spokesman for the Illinois Association of School Administrators.

The administration is talking about shifting teacher pension costs to local districts at a time when other state assistance to schools has been cut in recent years, including general state aid and transportation reimbursements, Chamness said.

“You can’t say education is a top priority and then shift all of these costs onto school districts,” he said.

Still, Chamness said it is impossible at this point to say what the impact of the TRIP cut will be on schools.

“The devil will be in the details,” he said. “You can hardly respond to some of these ideas at this point. Clearly, if the state pulls out, the other participants would have to pick it up.”

The Illinois Education Association said it will fight any attempt to cut state funding for TRIP.

“It is an important program and something, certainly, retired educators and those close to retirement are counting on,” said IEA spokesman Charles McBarron. “To strike it out of the budget with one stroke seems to us to be a bad policy. There’s been no public discussion of it. We will be doing all we can to get it restored to the budget.”